Ambitious US property developer Michael Achenbaum is almost a year on from selling the freehold of his first London hotel, The Curtain, to the Reuben brothers in a sell lease-back deal. However, whilst he still retains management of The Curtain, not one to rest on his laurels, Michael is itching to get started on his next project and has set his focus on developing a new hotel in the English countryside. We sat down with Michael to get the inside scoop.
Two years ago, the UK hospitality braced itself for the launch of a new hotel in Shoreditch at the height of the East London members’ club boom. This was no rookie opening however, with the new project spearheaded by Michael Achenbaum, one of the most prolific and successful hotel developers in the US, who was fully prepared to muscle in amongst the competition in the capital.
The Curtain is a six-storey hotel and members club on Curtain road which opened its doors in 2017 following a £70m, four-year construction project.
It features 120 bedrooms for guests, a rooftop pool and restaurant Lido, spa, screening room, plus drinking den Billy’s Bar and open music space, proving its credentials as much more than just another hotel in the heart of Shoreditch. The Curtain is also home to the first London outpost of Red Rooster, a restaurant from Michelin-star chef Marcus Samuelson, who served as guest chef for Barack Obama’s first state dinner as president.
Upon launch, The Curtain was amongst good company, with The Ned opening in the same year and other high profile members clubs plotting their next expansion moves. Soho House stalwart, Shoreditch House is a mere 500 metres away.
Achenbaum wasn’t the slightest bit fazed however and from the get-go wanted to offer more than what is expected of a typical trendy members’ club.
“A lot of the other membership clubs – it feels to me – you’re paying to come and drink,” he says. “I did not want that to be our culture – I wanted it to be a great place to come and eat and drink but also experience something.
“We brought people in from some amazing places – our head of food and beverage was from Chiltern Firehouse, our head chef from Soho House, so I feel we are delivering something social here. A lot of other clubs, 1, they don’t focus on the service and we think that’s really important, but 2, at the same time, the overall experience will be driven by the fact that you get tremendous value from being a member, being able to see other things you may not otherwise be able to see.”
He was confident he had all the right ingredients to set The Curtain apart from its closest competitors and was aiming to recreate the success he had already found with the Gansevoort Hotel Group.
In 2004, he dared to build on untrodden land in New York, when he took the plunge to develop a hotel in the meatpacking district, which at the time, was very much pre-regeneration. Leading the charge, he created an ‘oasis in a desert’ and Hotel Gansevoort quickly became one of New York’s hottest hotels. In 2010, he opened the brand’s second spot on Park Avenue NYC.
He says London was a ‘natural fit’ and he was pursuing a site in the city for five to seven years before settling on Shoreditch. Guests from England account for around 15% of the group’s business in New York, so he says London is ‘obviously a feeder location’. Shoreditch wasn’t his first choice however.
“I was looking in Soho originally,” he reveals, “but I was just priced out, it never really made sense. That area is really controlled by three or four landlords and so you end up negotiating with the same people over and over again – they are very successful for a reason, not easy to negotiate with and so we were never able to find a deal that made sense for us.
“Then this area started to become the up and coming area that we kept referencing, we took a look at it and it had a lot of elements that reminded us of the meatpacking district or Williamsburg, and we wanted to be at the forefront of that,” he adds.
Once Achenbaum was tuned into Shoreditch, it took him two years to find the site on Curtain Road and almost another four years to bring the project through to fruition. “We bought the land in 2013 and got open in spring 2017”, he explains.
Originally planning to create the vibe of an English country house, Achenbaum quickly learnt that people come to Shoreditch with expectations of bare brick walls and industrial quirks, so the design concept was updated to reflect that.
“It’s our job to give people what they want, create environments they want and listen to our clients,” he adds.
“We wanted every single space to wow – you may not like every space – but we wanted to create spaces where someone says, oh that’s my favourite corner.”
His desire to create something that encapsulates the English country house style hasn’t waned however, and he is currently on the hunt for a new site to put down roots in the countryside. Having stayed at the likes of Chewton Glen, The Pig and The Fish, he says he ‘loves the vibe of these beautiful properties’ and is keen to replicate their success with something of his own.
He says: “I am actually looking for properties to do like a farmhouse concept, it’s more an experience. So the moment you get there, you are leaving your car, you are committing to the concept of that property and that’s what I want to try and create.
“I recently drove out to the countryside and looked at two sites – it would tie back to this property. That experience of the best of what we’ve seen elsewhere and try to combine it into our own vision.
So does that rule out another property in London for the Achenbaum UK empire?
“I would do one, we are talking to people,” he teases. “i’m looking in New York and here, so it may be a case of which one comes first because I only have so much time and capital. I have no set number I’d like to get to, I just want to do projects that are fulfilling for my guests; I’m looking at Portugal and Amsterdam too.”
Earlier this year, Achenbaum sold The Curtain to property investor giants the Reuben brothers in a deal that was described as ‘purely transactional’.
The lease agreement allows Reuben Brothers to benefit from additional upside through a share of the hotel’s operating income. Achenbaum says he was looking to do a sell lease back and following a broker introduction deciding that the brothers were ‘the right party at the right time’.
“They’ve been super supportive,” he says of the partnership, “very hands off, only things they’ve done actually is make suggestions and introductions, so it’s been a really great relationship so far.”
The sale freed up capital for Achenbaum to plough on with further expansion plans, with the new countryside venture firmly in the pipeline now.
“It puts us now in position to do other deals,” he adds, “especially the countryside deal we are looking at. In New York I’m hoping to be signing up a membership club in Brooklyn to be able to do something there as well which I think ties in well to this area. We always try to be a little bit ahead of the curve when it comes to location. Financially the rewards are greater but we are also willing to take the risks as well.”
The Curtain bids to bring a breath of fresh air to both the hotel industry and members club environments in the city and its cultural events programme helps to add value for members whilst also bringing an attraction for hotel guests too. From resident DJ sessions to film screenings and wellness workshops, the regular schedule of creatively-led events seven days a week encourages integration and interaction among members to ensure The Curtain is a hub of its local community.
Right now the split between members and hotel guests is around 45% / 55%, but Achenbaum says that in the long run he is focused on increasing the membership base, which is ultimately what drives the business.
“If you look at net dollars it will be driven by membership club, not all of the membership fee goes to the bottom line but as you get to an incremental level where you have covered your fixed costs, it starts to look like that. Eventually as we grow it should be that way.”
Across the pond
The Curtain was Achenbaum’s first opening in the UK and compared to developing a hotel in New York, he admits he has ‘learnt a lot about the intricacies of British law’. In New York minimum wage has just risen to $15 an hour (around £12) making it expensive to run restaurants, with the pressure to roll this out across the country escalating.
“It all adds up very quickly when you are doing a very labour-intensive business,” Achenbaum adds.
He also says that business law in the US is much more ‘clear cut’.
“In the US, especially somewhere like NYC, it’s much more clear cut what your rights are. You usually buy a piece of land with a certain multiple of the size of property of what you’ve built, here you have to ask the local council what they are comfortable with.
“It’s less delineated by structure that you can count on, and here it’s a little bit more subjective so it’s a bit of scary feeling as a developer.
“We’re not just managers or creative partners we are investors in most of our projects, so very early on I need to know the economics as to whether I’m going to pursue it or not.”
So a year on from the sale of The Curtain, Achenbaum is already getting his teeth sunk into his next project and this ambitious entrepreneur shows no signs of slowing quite yet.